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Why the US Should Moderate Its View of Indonesia

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Recognizing the importance of financial stability in Southeast Asia after recent turbulence in the markets, the United States, on Nov. 1, joined in supporting a package of international assistance to Indonesia.

Multilateral lending agencies - the International Monetary Fund (IMF), the World Bank, and the Asian Development Bank - supplied $18 billion of a $35 billion package. The remainder came from the US, Singapore, Japan, Malaysia, and Australia. Washington's share was $3 billion.

Given Washington's recent criticism of Indonesia and a cooling of relations between the two, US participation was courageous - but justified, if the Southeast Asian nation is seen in perspective.

The US image of Indonesia, the world's fourth most populous country and the largest Muslim nation, has been tarnished in recent years. Jakarta's take-over and sometimes brutal rule of East Timor have dominated that image.

President Suharto, his family, and cronies are viewed as an undemocratic oligarchy dominating politics and commerce for their own benefit. The lack of a clear pattern of political succession breeds uncertainty about the future.

US-Indonesian relations were further strained when Mr. Suharto cancelled the purchase of F-16 aircraft and terminated a long-standing military training program. If these were not sufficient causes for caution by US political leaders, allegations that an Indonesian businessman close to President Clinton had tried to influence US policies through campaign gifts placed relations in the spotlight.

But there are other parts to this picture. Indonesia, as much as any developing country, has over many years demonstrated conscientious diligence in using resources wisely and furthering development. When a brilliant group of US-educated technocrats assumed charge of the economy in 1966, they set the country on a remarkable path of development, using oil revenues constructively for rural and social improvement. Indonesia, in recent years, has been able to control inflation, maintain high rates of savings and investment, and reduce substantially the incidence of absolute poverty.


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